Passionate about IP! Since June 2003 the IPKat has covered copyright, patent, trade mark, info-tech, privacy and confidentiality issues from a mainly UK and European perspective. The team is Neil J. Wilkof, Annsley Merelle Ward, Nicola Searle, Eleonora Rosati, and Merpel, with contributions from Mark Schweizer. Read, post comments and participate! E-mail the Kats here

The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Tuesday, 31 May 2011

Is there corruption at the highest levels of the sport which most of the world (i.e. almost everywhere except the USA) calls football? You may as well ask, do dogs have fleas? This member of the IPKat team has long assumed that there is, his impressions being based only on the evidence in the media of the increasingly bizarre behaviour, statements and decisions of its leaders, culminating in the extraordinary and nearly universally criticised (i.e. almost everywhere except in Qatar) decision to host the 2022 World Cup tournament in Qatar.

This is a year of change. Dictators have tumbled in Egypt and the Ivory Coast; Colonel Gaddafi's regime totters in Libya. Football's governing body Fifa stumbles from crisis of credibility to crisis of incredibility, yet Sepp Blatter appears as unshiftable as ever. Surprisingly it has taken until now for the businesses that pour vast sums of money into Fifa's pockets to express any concern over the ongoing soap opera which is Fifa today. According to today's report from the BBC,

"Sponsors associated with Fifa have expressed concern at the damage allegations of corruption are causing world football's governing body. Coca-Cola and Adidas [two of the world's biggest brands, notes Merpel, which have achieved status through an association with all that is supposedly clean, healthy and decent] have voiced worries over the controversy, despite Fifa president Sepp Blatter stating that the organisation is not in crisis.

But a Coca-Cola spokesperson said: "The current allegations being raised are distressing and bad for the sport."

Fellow sponsors Visa and Emirates are keeping a distance from the row [the position of popular airline Emirates is as sticky as a footballer playing in temperatures of 40-50 degrees, notes Merpel, since Qatar is an emirate ...].

Blatter is expected to be re-elected to his post unopposed after his only rival candidate in Mohamed Bin Hammam, president of the Asian Football Confederation (AFC), withdrew from the race to govern Fifa.

In the lead up to the 1 June vote [that's tomorrow], which there have been calls to postpone, Bin Hammam has been provisionally suspended by Fifa's ethics committee over allegations that financial incentives were offered to Caribbean Football Union members. Concacaf president Jack Warner, whose Fifa association governs the region of North, Central American and Caribbean football, has also been provisionally suspended.

The world awaits a truthful explanation. But will it come out?

And, in a progression of claim and counter-claim, Bin Hammam has appealed his ban, while Warner has revealed an e-mail sent to him from Fifa general secretary Jerome Valcke suggesting Bin Hammam had "bought" the 2022 World Cup final for Qatar.

Although Valcke has moved to clarify his remarks in the e-mail, the developments will have fuelled bribery claims over the bidding process to host the 2022 World Cup tournament, which will be held in Qatar. ...

"We have every expectation that Fifa will resolve this situation in an expedient and thorough manner," added the Coca-Cola spokesperson [Drafted by the Department of Wishful Thinking?]. An Adidas spokesman said: "Adidas enjoys a long-term, close and successful partnership with Fifa that we are looking forward to continuing. Adidas will be an official sponsor of Fifa World Cup 2014 in Brazil [an event which seems to have been eclipsed by recent news, and which does not, to this Kat's recollection, seem to have attracted any accusations]. Having said that, the negative tenor of the public debate around Fifa at the moment is neither good for football nor for Fifa and its partners"."

The IPKat personally doubts whether the scandal at the top end of Fifa will tarnish the reputation of any of the sponsors. This is because World Cup is an extremely popular event which generates so much goodwill that probably even Fifa can't destroy it. He also doubts that it would be worthwhile for the sponsors to withdraw -- even if their contracts so provided -- for the same reason: the saturation coverage to which they are entitled can't be conveniently obtained elsewhere at any price and there would be no shortage of substitute sponsors. He is however pleased to see the sponsors express some concern at the conduct of the miserable, humourless and heavy-handed bunch which has ruled the Beautiful Game for far too long.

Monday, 30 May 2011

The dust has not yet settled on Digital Opportunity: a review of intellectual property and growth (the main recommendations of which are noted here), the fabled Hargreaves Review of how to make money from your own intellectual property and other people's, so it's high time for a brief round-up of responses to it (an earlier review of very swift responses to Hargreaves was posted on the 1709 Blog here).

“Suggestions that Professor Hargreaves would propose sweeping new changes in copyright law have proved to be nonsense. Instead he has chosen to revisit some of the more sensible proposals from previous work. As a journalist and academic, Professor Hargreaves knows that in a digital world of clouds, networks and user-generated content we are all both users and owners of digital rights [This Kat, who has had some experience of both academe and journalism, wonders whether -- though there be exceptions -- both groups benefit more from free and easy access to others' works than from the protection of their own]. So despite the talk of copyright wars, fair and effective rules require thoughtful and proportionate change, not hyperbole".

His partner Simon Levine however added a word of caution, based on the fact that the internet is global, copyright is fraught with international obligations, but anything the UK even thinks of doing is going to be somewhat parochial unless everyone else does it too:

“... if businesses are ever going to be able to fully exploit the opportunities that the internet offers as a global channel to market, it is essential that we focus on how international IP laws can be harmonised accordingly. This is acknowledged in the report ... The Hargreaves report contains some very sensible and well-considered proposals. However, it remains to be seen how these will be translated at an international level – and it is this that will dictate its true impact” [It's not just a question of international law, says the Kat, it's a question of diplomacy: for as long as it's profitable for rogue states to remain rogue states, the problems will be shifted around but not eliminated].

More caution comes from the Federation Against Software Theft (FAST), which was not slow to express concern over the uncertainty of what exactly will be taken forward and how quickly.

"Key findings of the Report include the suggestion of a ‘Digital Copyright Exchange’, where the intention is to promote growth by having an efficient, open and effective digital market where rights can be can be speedily licensed and effectively protected. The intention is noble. However, it is yet to be seen how this could work in practice or whether it is intended or even desirable for the software industry to participate [The software industry in Europe has a modified statutory version of the digital copyright exchange, says Merpel -- it's called the interoperability and reverse engineering provisions of the Software Directive. The software industry wasn't given much of a choice as to whether to participate, but doesn't seem to have died from it]. :

A more telling cautionary note from FAST comes from its contrasting the recommendations of Hargreaves with those of its predecessor, the Gowers Review:

“In 2006, Gowers recommended that the enforcement regime should be ‘effective and dissuasive’ and arguably it is not when simply a licence fee can be paid if an infringer is caught on the hop; the Gowers sentiment should not be forgotten. [It hasn't been forgotten, says Merpel. It has been ignored]”

The metaphor of "destinations without routes" is that chosen by Andrew Sharples (partner and head of EIP Life) to epitomise Hargreaves in his review here. The Review acknowledges that it is “focused upon the main issues, at the risk of ignoring important points of detail” -- but the main issues have to be seen as targets that can somehow be achieved: the detail helps us understand how to get there as well as letting us know which recommendations are too ambitious to be achieved at all. He too focuses on the Digital Copyright Exchange (DCE), which would be

" ... a common, standardised platform for licensing works. ... However, the Review also acknowledges that to encourage uptake there will need to be disadvantages to not being part of the exchange; suggestions include greater damages for infringement of works included in the exchange; applying sanctions under the Digital Economy Act only in relation to works included in the exchange; giving creators the right to withdraw from publishing agreements where the publishers do not place works on the exchange; and perhaps most controversially, treating works not placed on the exchange as “orphan works” ... [Expect an avalanche of holiday snaps and wedding photos if this idea ever gets accepted, warns Merpel] The Review does not advocate that the government creates the DCE (so as to avoid “a nightmare of IT procurement followed by the birth of a white elephant”) but instead brings together interested parties to find ways of overcoming divergent interests. How these divergent interests are to be overcome is not clear though, and almost as soon as the Review was published criticisms were made of the viability of this proposal. Certainly the goal of establishing the DCE by the end of 2012 seems optimistic".

Orphan works also come in for his attention. Can the UK do its own thing regarding such works, given that works 'freed up' for use under emancipating legislation may still be regarded as infringing copyright everywhere else in the world:

"The problem of orphan works, i.e. works for which the rights holder cannot be identified, is addressed, the suggestion being that after a diligent search to locate the owner, orphan works should be deemed to be licensable for a nominal fee. This would free up the use of large bodies of works in the national archives. However, it is suggested that a diligent search would simply require checking if a right is contained in the DCE, and, if not, treating it as an orphan work. This could effectively introduce a requirement for copyright registration, and it is questionable whether this would be consistent with the UK’s obligations under the Berne Convention to provide copyright without a registration requirement [Article 5(2) of the Berne Convention states that "The enjoyment and the exercise of these rights shall not be subject to any formality". Merpel says, I'm no lawyer and I'm pretty informal -- but this looks like a formality to me ...]".

A more encouraging view of the DCE comes from Maxine Horn (CEO of Creative Barcode -- a company that neither creates new designs nor uses other people's, but provides digital watermarking by which use of designs can be monitored and licensing thus rendered more effective). After analysing the proposal she concludes:

"A Digital Copyright Exchange implemented in a robust whilst non-complex manner would serve the creative industries and innovation focused businesses very well. Those who feel that an open-source or ‘freeconomy’ based on free access to use, replicate, re-mix or build on others knowledge and work is the only route to innovation growth are perhaps not considering the rights of the creative industries to earn a living from their original works. IP, particularly pre-commercialised, does not need to be restrictive to be effective [This is the problem, says the Kat: we all know what 'restrictive' means, but 'effective' carries no single shared meaning -- and we're talking about the conflicting interests here]. A fair model that recognises respects and remunerates the professional idea generators, creators and solution-led creative consultancies should surely open up innovation not restrict it".

Creative Barcode gets a nod in the Forbes Blog's comment on Hargreaves, "Copyright and Related Laws Hold Back Innovation and Growth, Say British", which views the UK from a distant US perspective and says:

"This is not exactly a call for a new type of creative commons, though CC licensing has clearly aided the growth of services like Flickr and platforms like WordPress. What the British want to see is a Digital Copyright Exchange, a market where digital rights can be processed rapidly and cheaply [Says Merpel, processing digital rights sounds a bit like an exercise in commodifying IP. Have humans and their feelings been eliminated somewhere along the line?]".

The IPKat remains committed to keeping an eye on Hargreaves. If anything exciting comes of it, he will do his best to let you know.

The IPKat would like to take the opportunity to wish a Happy 40th Birthday to the Benelux Office for Intellectual Property (BOIP). Originally born as the Benelux Trade Marks Office on 1 January 1971, the BOIP is now a key player in the international intellectual property landscape, and more specifically, in the international registration systems for trade marks and designs administered by WIPO.

To commemorate the occasion, the BOIP published In Varietate Concordia?: National and European Trademarks living apart together. The work is collection of essays by well known authors on new problems in trade mark law:

The book is well worth reading (even with Babelfish translations if you are not fluent in all three languages) for the sustained treatment of trade mark issues arising at the national, community and international levels. It also has the honour of being the first book this Kat owns which comes with its own commemorative book box.

The IPKat notes some useful BOIP trivia: the Office itself claims the fastest trade mark processing times in the world and was ranked first in terms of overall performance in an international survey published by Managing Intellectual Property in May 2010. Merpel suggests that this trivia should give the UK’s IPO something to aspire to …
.Bibliographical details: hardback, pp 184, ISBN 978-90-811477-3-6. Available only if you are a friend of the BOIP, or a friend of a friend, it seems, since no purchase details are provided. Rupture factor: minimal. Bookcase show-off factor: high.

At last we know who has control over the talismanic name Lotus, much loved in motor racing circles and once symbolic of a fruit eaten by lovers of luxury and self-indulgence. Our information comes courtesy of a ruling this Friday in Group Lotus Plc and another v 1Malaysia Racing Team SDN BHD and others[2011] EWHC 1366 (Ch), a gigantic decision of Mr Justice Peter Smith in the Chancery Division, England and Wales (388 paragraphs, plus appendices) to the effect that Team Lotus Ventures is allowed to call itself Team Lotus.

In short, British inventor and car designer Colin Chapman was the founder of Lotus Cars, which first competed in motor racing events in 1948. He died of a heart attack in 1982 and, following which event there has sadly been a fair bit of contention as to who is qualified to use the term 'Lotus'. This has crystallised into the litigation noted in this post, and alluded to in an earlier post here. Some flavour of the dispute and what it means to the parties can be gleaned from today's report in the Irish Independent:

"In Monaco this weekend, in one particular pit garage, they were celebrating an important victory. [Entrepreneur and AirAsia founder]Tony Fernandes was jubilant at the hot-off-the-press news that a high court judge had just ruled that his team has a right to use the name 'Team Lotus'. Down the way at Renault, by contrast, the team's shareholder and title sponsor 'Group Lotus' -- which is owned by Proton -- were in shock. Proton had originally granted a license to Fernandes for the use of the name 'Lotus Racing' for five years. But one year into the contract they withdrew it. So Fernandes, who has invested over £80m in his team since its inception in 2009, purchased the dormant name 'Team Lotus' from David Hunt (brother of former world champion James Hunt), who had picked it up from the administrators when the iconic team went bankrupt in 1994.

The original Lotus MK1 was
a souped-up Austin 7

... 'Team Lotus', as the name suggests, is and was an F1 racing entity, whereas 'Group Lotus' manufactures cars. 'Team Lotus' switched from Cosworth to Renault engines this season. Group Lotus and a company called Genii Capital own the former 'Renault F1' team. It gets even more complicated than that. ... The Chapman family sold the Lotus company some 20 years ago and since then it has been owned by General Motors, Bugatti and now Proton. But having initially backed Fernandes' 'Team Lotus' in a fanfare of publicity, the Chapmans have switched their allegiance to Lotus-Renault.

Proton is Malaysian, as is the English-educated Fernandes. The car giant was part of a consortium that backed Fernandes when he first entered F1".

The Kat glazes over with all these details to understan

But what of the ruling itself? According to a note posted on the website of 20 Essex Court, whose barristers appeared for defendants Team Lotus, Peter Smith J has now held that Team Lotus Ventures (TLV) owns the goodwill associated with the Team Lotus name and roundel, and that Group Lotus's claim to the name should be dismissed. It's not all good news for TLV though, since the judge ordered that it be revoked for non-use during the period in which TLV was not involved in Formula 1 racing. By way of consolation, TLV -- and not Group Lotus -- was entitled to the registration of new trade marks registered for the team's name and roundel. In further holdings, the judge concluded that TLV's use of its name did not infringe Group Lotus's trade marks in the name Lotus and that 1Malaysia was not to be restrained, by reason of a licence agreement between it and Group Lotus in 2009, from using the name Team Lotus. However, 1Malaysia had been in breach of the licence agreement in failing to obtain approval for the manufacture and sale of 'Lotus Racing' merchandise in 2010, this licence having been validly terminated by Group Lotus in September 2010. Did you follow all of that? No? Well, it took this Kat a few readings before he got the hang of it, but he wouldn't want to have to explain it to anyone after he'd been at the catnip.

The judge made an interesting observation on this case, which occupied seven hearing days and plainly wasn't as much fun as the Da Vinci Code litigation in which this occasional IP judge presided:

"387. It is unfortunate in my view that this case came before the courts and was incapable of resolution beforehand. However if the parties cannot agree to resolve a dispute that is why the courts are here. At the end of the day I cannot help feeling that nevertheless the parties are better competing against each other on the F1 racetrack. Equally I cannot help avoiding the feeling that F1 followers would actually find that enhances F1 and they would be interested to see which of the two Lotus cars was more successful and which then might possibly be better placed to claim to be successors to the Colin Chapman mantle".

The IPKat is enchanted with the notion of competing parties resolving their disputes in this fashion. If litigants fighting over a racing brand can settle their grievances over 24 laps at full throttle, there must be scope for other novel means of satisfying bruised honour.

Sunday, 29 May 2011

This Kat is often perturbed that the advertisements in her Gmail and FaceBook accounts seem to be personalised through no action by her. Indeed, recent advertisements on both sites have related to wine, law, cats, Sydney and/or army boot camp training (the last, of course, being a complete mystery). It with interest, then, that this Kat has been following the progress and (lack of) implementation of the EU 'Cookie Directive'.

For those unfamiliar with the concept of a 'cookie', it is a file which is stored on your computer by your web browser when you visit a website. A cookie can be used for remembering log in details, site preferences, shopping cart contents and anything else that can be accomplished through storing text data. Accordingly, cookies are a provide a wealth of useful information for targeted advertising.

The EU first enacted provisions relating to cookies in 2002 in the form of the ePrivacy Directive. In the UK, this was implemented by Regulation 6 of the Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECR):

Confidentiality of Communications6. (1) Subject to paragraph (4), a person shall not use an electronic communications network to store information, or to gain access to information stored, in the terminal equipment of a subscriber or user unless the requirements of paragraph (2) are met.

(2) The requirements are that the subscriber or user of that terminal equipment -(a) is provided with clear and comprehensive information about the purposes of the storage of, or access to, that information; and (b) is given the opportunity to refuse the storage of or access to that information.

(3) Where an electronic communications network is used by the same person to store or access information in the terminal equipment of a subscriber or user on more than one occasion, it is sufficient for the purposes of this regulation that the requirements of paragraph (2) are met in respect of the initial use.

(4) Paragraph (1) shall not apply to the technical storage of, or access to, information—(a) for the sole purpose of carrying out or facilitating the transmission of a communication over an electronic communications network; or(b)where such storage or access is strictly necessary for the provision of an information society service requested by the subscriber or user.

That is, websites had to tell users how they used cookies and how users could ‘opt out’ if they objected. Many websites did this by putting information about cookies in their privacy policies and giving people the possibility of ‘opting out’.

On 25 December 2009 an amended Directive came into force which had to be implemented into the national law of Member States by 25 May 2011. Accordingly, Regulation 6 of the Privacy and Electronic Communications (EC Directives) (Amendment) Regulations 2011 reads like this:

Confidentiality of Communications6 (1) Subject to paragraph (4), a person shall not store or gain access to information stored, in the terminal equipment of a subscriber or user unless the requirements of paragraph (2) are met.

(2) The requirements are that the subscriber or user of that terminal equipment--(a) is provided with clear and comprehensive information about the purposes of the storage of, or access to, that information; and(b) has given his or her consent.

(3) Where an electronic communications network is used by the same person to store or access information in the terminal equipment of a subscriber or user on more than one occasion, it is sufficient forthe purposes of this regulation that the requirements of paragraph (2) are met in respect of the initial use.

(3A) For the purposes of paragraph (2), consent may be signified by a subscriber who amends or sets controls on the internet browser which the subscriber uses or by using another application or programme to signify consent.

(4) Paragraph (1) shall not apply to the technical storage of, or access to, information--(a) for the sole purpose of carrying out the transmission of a communication over an electronic communications network; or(b) where such storage or access is strictly necessary for the provision of an information society service requested by the subscriber or user.

Therefore, a website operator required informed consent from the user before activating cookies. This amendment came into force on 26 May 2011.

Now 26 May 2011 was last Thursday. So why are UK websites not asking this Kat for 'permission to cookie'?

The answer is that Ed Vaizey, Minister for Culture, Communications and Creative Industries, and the Information Commissioner's Office (ICO) have reached a prior agreement concerning enforcement of the amended Regulations.

The ICO, as enforcer of UK data privacy legislation, was of the view that the new regulation needed to be interpreted strictly and immediately. Indeed, on the front page of its own website, the ICO states:

'On 26 May 2011, the rules about cookies on websites changed. This site uses cookies. One of the cookies we use is essential for parts of the site to operate and has already been set. You may delete and block all cookies from this site, but parts of the site will not work. To find out more about cookies on this website and how to delete cookies, see our privacy notice'.

Users are then invited to tick a box to accept cookies from the site.

However, the government was not so enthusiastic. In particular, it was concerned about the possible detrimental effects on UK online retailers: the burdensome necessity of obtaining consent from users could make online shopping so cumbersome and intrusive that consumers would use US sites rather than UK sites.

On Wednesday, Mr Vaizey stated in a press release that ‘there will be no immediate changes to how UK websites operate as a result of new EU rules’. Rather, he stated that the government would work with website operators to ‘come up with workable technical solutions’. In a press release, the ICO stated that website operators have up to one year to ‘get their house in order’ and that ‘this does not let everyone off the hook’.

The IPKat agrees with Mr Vaizey’s earlier comment at the CBI forum on e-privacy and the digital economy that the new cookie provisions were ‘a good example of a well-meaning regulation that will be very difficult to make work in practice’.

Merpel wonders, if she chooses not to accept cookies from a particular site, whether she can somehow stop that same site continually asking her if she wants to accept cookies (because that site cannot set a cookie indicating her 'no cookie' preference)?

Friday, 27 May 2011

Several of my fellow Kats managed to do a better job than I in juggling the recent INTA meeting in San Francisco with other tasks, as evidenced by my recent silence. Just for the record though--I did set a new speed record for the fastest dash by a post 60-year old as he literally ran from Gate L1 to Gate 17K at O'Hare airport in Chicago to catch a trans-Atlantic flight. With those heroics now behind me, it is time to get back to IPKat and the the task at hand.

In keeping with INTA and its focus on trade marks, permit me to pose the following question: Does a trade mark have to be truthful? In one sense, the answer is most certainly "yes". The source theory of trade marks is predicated on the notion that no one is permitted to use your mark if such usage might deceive the public with respect to the source of the goods or services. In this case, therefore, a trade mark has to be truthful with respect to source.

But what about a mark that lies somewhere in that murky area between being descriptive and suggestive? Here we can find ourself in a situation in which the mark, even if registered, still has an element of descriptiveness with respect to the goods or services which it identifies. What happens, as a matter of trade mark law, if that descriptive element is factually inaccurate with respect to the underlying goods or services? In particular, can the mark, being descriptively innacurate, prevent a third party from using the same term in an accurate manner in connection with the same goods or services?

I thought of this question in connection with that most curious American phenomenon, the big business of intercollegiate sports. Alongside the educational function, most American colleges and universities maintain large athletic programmes, most notably in (American-style) football and basketball (think "March Madness") that pay seven-figure salaries for the head coach and fill stadia of 100,000 or more seats. For efficiency purposes, most colleges and universities belong to one of a number of sports conferences. The members of each such conference are usually in geographic proximity with each other, which cuts down on travel and fosters natural rivalries between the flagship universities of contiguous states (think Ohio State and University of Michigan).

Not surprisingly, each conference has a name -- and in this lies the potential for factual inaccuracy. Two of the most well-known conferences are the Big Ten Conference and the the Big 12 Conference. The problem is that the Big 10 Conference now contains 12 memembers (with the recent addition of the University of Nebraska) and the Big 12 Conference now contains only 10 members (with the departure of the University of Colorado and the University of Nebraska). Both of these conference names are registered as trade marks in one form or another.

And so--the question. Should both the Big Ten and the Big 12 be allowed to maintain their respective trade mark registrations in light of the fact that the reference to the respective number of conference members is in each case inaccurate? On the one hand, since there is no likelihood of confusion with respect to the ultimate organizational source of each of these sports conferences, it is possible to argue that the numerical inaccuracy is irrelevant as a matter of trade mark law. Indeed, if the respective names would simply be a matter of indicating how many members belong to each of these althetic conferences, it is arguable that neither should enjoy trade mark protection. The fact that each of these names is registered as a trade mark indicates that each of these names has achieved goodwill as an indicator of source.

On the other hand, consider a college athletic conference that has either ten or 12 members. Should such a conference be prevented from calling itself the "Big Ten" or the "Big 12", if such a designation is factually accurate, simply because in so doing, it would be liable for infringement? Stated otherwise, in a potential conflict between source identification and factual accuracy, isn't there something wrong in favouring the former over the latter?

For the record, I am a die-hard Ohio State supporter. Ohio State is a member of the Big Ten Conference, which has 12 members, not ten members. I am not confused about the fact that the name Big Ten identifies a specific athletic conference that once had ten members, but now has 12 members (and may in the future have even more). As a trade mark practitioner, however, I wonder: should the Big Ten Conference (or Big 12 Conference) be forced to change its name?

The IPKat put in four 16-hour days at the recent International Trademark Association Meeting in San Francisco, but was still unable to cover more than a small amount of the programme. He is therefore grateful to his friend and fellow blogger Aurelia J. Schultz for providing him with this note on one of the Table Topics which she attended:

"Counterfeit Goods, Civil Liability and Criminal Punishment

Lock them up or make them pay? An international group of lunch munchers explored the various considerations in this choice at one of this year’sINTATable Topics: The Intersection of Criminal Prosecution and Civil Trademark Enforcement, moderated by Michael J. Allan of Steptoe & Johnson LLP. In opting for one or other option, there are two main questions to ask: What do you want? How likely are you to get it?

What do You Want?

In China, a successful criminal prosecution will get you the satisfaction of jail time for the defendant and a guarantee that confiscated counterfeit goods will be destroyed on 15 March, National Customs Day, when all confiscated counterfeit goods from across the country are destroyed. It will not however, get destruction of the machinery used to produce the counterfeit goods and it will not get the trademark owner any money. In the US, a successful criminal prosecution can include money for the trademark owner in the form of restitution, but the amount is far less than possible damages in a civil suit.

Occasionally, it may happen that law enforcement begins a criminal investigation before the trademark owner brings a civil suit. Things can get a little tricky when both cases wind up in the court system at the same time. In the United States, the common procedure is for the defendant to ask for a stay of the civil proceedings until the criminal proceedings are complete. Whether the court grants this stay can greatly affect the procedure of the civil case; thus the plaintiff needs to decide whether to argue in support of or against the stay. A stay can make things easier for the plaintiff in the civil case because the government will do a large part of the discovery work through its investigation. Plus, if the defendant is found guilty in the criminal case, that can be used to show liability in the civil case. However, not having the stay can also benefit the plaintiff in the civil case by forcing the defendant to make some tough decisions. Under the US Constitution’s Fifth Amendment, the defendant has a right not to testify in a criminal proceeding. But, if he chooses to testify in the civil case, that right is considered waived. In Latvia, there are no choices to make; the stay is automatic.

How Likely are You to Get it?

One notable consistency across the countries, if you want criminal enforcement, you’re probably going to have to do the dirty work yourself. Governments are short on resources, money, time and personnel. In the United States, trademark owners who want to close down counterfeit operations are more likely to get results working with the local law enforcement and prosecution offices, rather than with any of the various federal agencies. In China, success is more likely with engagement of officers at higher government levels, most notably the Ministry of Public Security. Local decision makers are often friends with the counterfeiters.

Convincing law enforcement to get involved can be challenging, even if you’re able to foot the bill. Generally, you need to show that involvement in your case benefits the greater public. In the United States, all you have to do is find some way to persuade law enforcement that this counterfeit goods operation is linked to terrorism. In Latvia, the sell is a little more difficult unless the counterfeit good is physically dangerous; loss of tax revenue is often the best point. But there are also some places where the convincing is not as needed. In Latin America, criminal prosecution is the standard for trademark infringement and counterfeit goods. Civil cases just take way too long.

So when do you go for the money, when do you try for criminal enforcement and when do you have to choose? Generally, you go for the money when you want money and you go for criminal enforcement when you are dealing with repeat counterfeiters and want the whole operation shut down, provided you can find a willing government partner and do some funding. [Which brings up a very interesting question about access to justice, but I’ll leave that for the comments section…]".

Thursday, 26 May 2011

When is a threat not a threat? This is the question posed by the IPKat in July of last year, which was also before the Chancery Division England and Wales, in Best Buy Co Inc and another v Worldwide Sales Corporation Espana SL. This case turned on the meaning of the Trade Marks Act 1994, section 21:

"(1) Where a person threatens another with proceedings for infringement of a registered trade mark other than— (a) the application of the mark to goods or their packaging, (b) the importation of goods to which, or to the packaging of which, the mark has been applied, or (c) the supply of services under the mark, any person aggrieved may bring proceedings for relief under this section.

(2) The relief which may be applied for is any of the following— (a) a declaration that the threats are unjustifiable, (b) an injunction against the continuance of the threats, (c) damages in respect of any loss he has sustained by the threats; and the plaintiff is entitled to such relief unless the defendant shows that the acts in respect of which proceedings were threatened constitute (or if done would constitute) an infringement of the registered trade mark concerned.

(3) If that is shown by the defendant, the plaintiff is nevertheless entitled to relief if he shows that the registration of the trade mark is invalid or liable to be revoked in a relevant respect.

(4) The mere notification that a trade mark is registered, or that an application for registration has been made, does not constitute a threat of proceedings for the purposes of this section".

The claimants (US corporation Best Buy and its UK subsidiary) intended to open a series of shops in the UK and elsewhere in Europe under the name 'Best Buy'. Worldwide, a Spanish corporation, held a number of national and Community registrations that contained the words 'Best Buy' in combination with devices and graphics. The claimants applied to register as a Community trade mark (CTM) a sign including the words 'Best Buy'. Worldwide opposed, so the claimants' lawyers wrote to Worldwide to ask about a possible coexistence agreement. In response they received a "without prejudice" letter from Worldwide's lawyers stating that their client was entitled to take appropriate legal action to defend its interests in the event that the claimants should start to expand into the European market. The claimants then commenced section 21 proceedings, alleging that this letter was an unwarranted threat to launch trade mark infringement proceedings against them.

Floyd J was asked to determine four issuesd: (i) did the letter threaten proceedings for infringement? (ii) was the threat made in relation to an infringement which fell within the "other than" bit of section 21 and was thus excluded from the operation of the section? (iii) if a real, live, actionable threat had been made, was the letter admissible as evidence, given that it was written "without preducice"? (iv) did section 21 apply just to threats to sue in respect of infringement of UK registered marks in the UK, or did its extension under the Community Trade Mark Regulations 2006, reg.6(1), to cover Community trade marks make unwarranted threats to sue for CTM infringements anywhere in the EU actionable too?

Floyd J dismissed the claimants' action. He agreed that any reasonable businessman in the position of the claimants would have understood from the letter in the clearest terms that proceedings for infringement of trade mark were threatened if negotiations failed and they decided to use trade as Best Buy. It didn't matter if the proceedings threatened infringement of a UK mark or a CTM: what mattered was that the threatened proceedings had to be an infringement action in the UK. Section 21 did not concern itself with the harmful effects of proceedings threatened in jurisdictions other than the UK. If it did, then it would be a trap for the unwary in all the 26 other EU member states.

Floyd J considered that Worldwide's letter showed it had a range of options as to the forum in which it could bring proceedings, including both Spain and the UK, and that if the claimants opted to trade as 'Best Buy' in the UK, that jurisdiction would be a likely choice for proceedings. On this basis, section 21 applied even if it did not specifically threaten proceedings in England. The reasonable recipient of Worldwide's letter would not have understood the threat of proceedings as being limited to the supply of services (which was excluded from liability under section 21(1)).

Notwithstanding this, the claim failed. Since Worldwide's letter was written and sent in the context of correspondence between the parties which was part of a negotiating process, it fell firmly within the protection of the "without prejudice" rule -- and that was an end to the matter. Part of the letter was in response to earlier points, while other bits sought to underline the strength of Worldwide's position: you couldn't chop the letter up into those parts which were in response to the request to negotiate and those which were not. Taking a global view of the letter in its context, it was a response to the claimants' proposal and not a threat.

The Court of Appeal (Lord Neuberger MR, Etherton and :Patten LJJ) yesterday reversed this decision in [2011] EWCA Civ 618. While the judge's characterisation of the letter as a threat was correct, his conclusion regarding "without prejudice" was not. Said the Master of the Rolls, with whom Etherton and :Patten LJJ agreed):

"37. The question in the present case is whether the September letter, or at least the last three paragraphs of that letter, would reasonably have been understood to have been intended to have this privileged status. It may seem at first sight that this is an over-simplification of the issue, given the significance of public policy in this field, but, on analysis, I do no think that it is. That is because the question I have suggested really incorporates the public policy issue, as it involves considering whether the parties would reasonably have thought that their negotiations in the correspondence in issue were sufficiently advanced to have moved into the "without prejudice" zone.

38. In my view, the Judge reached the wrong conclusion on this issue. In addressing this question, I think that he may have concentrated on the last three paragraphs, without properly considering the September letter as a whole: in that sense, he let the tail wag the dog. The letter was concerned to set out, in some detail, the defendant's objections to BBES's actual and proposed use of the Best Buy mark, and the extent of the defendant's interest in and rights over the use of that mark, as well as threatening BBES with infringement proceedings. The proposals at the end of the letter were, as I see it, a generally and unexceptionally expressed offer to negotiate a settlement of the issues, with two possible routes being raised".

The court offered this little idea, which is bound to attract further litigation: perhaps "without prejudice" correspondence isn't excluded from liability for threats at all?

"42 ... I think the Judge was wrong to hold that the September letter was privileged from use in court. ...[E]ven if I had agreed with his conclusion that the last three paragraphs of the September letter brought the "without prejudice" rule into play, I would, at least as at present advised, nonetheless have held that the letter could be relied on to support the claimants' threat claim ...".

The IPKat's friend David Stone (Simmons & Simmons) summarises the position thus:

"... The Court of Appeal in effect is saying that courts will look at the substance of a communication rather than its form to decide if it is really without prejudice. Relevant considerations will include:

· the overall purpose of the communication (in this case it was held to be intended to act as a letter before action);
· whether there is a clear 'signal' that some parts of the letter are to be treated differently to others, in particular the use or absence of the words "without prejudice" (although this is not definitive and in a case where the authors are Spanish, such as here, is somewhat weaker as an indicator); and
· The court will not allow the words "without prejudice" to be used to allow threats to be made with impunity".

Wednesday, 25 May 2011

Warrant Officer Johan Nortje Appeal. The IPKat's good friend Frederick Mostert has asked him to draw the following to the attention of readers, which he is pleased to do:

The South African fight against counterfeiting was hit hard when Warrant Officer Johan Nortje was killed in the driveway of his home in January this year after being shot twice in the chest. Nortje worked with the South African Revenue Service, harbour police and Customs officials and was known for his integrity and courage. Early in January, Nortje organised a R100 million counterfeit bust in Durban harbour which, it is thought, led to his becoming a target - a businessman who is known for importing knock-offs from China ordered a R30,000 hit on his life. Three men were arrested for the murder and the fourth - the suspected trigger man - was shot and killed.

Warrant Officer Nortje leaves behind a wife and three children. Several intellectual property practitioners and law firms will contribute towards providing financial assistance to the Nortje family. Anyone who would like to make a contribution is invited to make a deposit directly into the bank account of Mrs Nortje (an account created specifically for this purpose) as per the following details:

Further information concerning Warrant Officer Nortje can be found on the Afro-IP weblog here.

Following the IPKat's citation of Howard Knopf's piece on Payback's attempt to claim the copyright symbol as a trade mark, the Kat has been reminded by reader Stewart Cameron that there is an IP practice which uses the symbol too -- albeit in a more discreet manner than Payback's. The Kat suspects that there are plenty more examples out there, and has no doubt that he will be hearing from readers on this topic.

Gray -- in colour!

Around the blogs. Miri Frankel is taking a break from the 1709 Blog, while she catches up with the exciting challenges of her new position. Meanwhile, the same blog welcomes a new team member, Naomi Jane Gray: Naomi, a partner in US West Coast practice Harvey Siskind LLP, is a blogger in her own right (Shades of Gray) and also tweets. Art & Artifice considers issues arising from a new sculpture of Pope John Paul II which allegedly resembles Mussolini. The MARQUES Class 46 blog is back online after some essential maintenance and repair. The jiplp weblog reviews a new book on how to present an argument better here. PatLit's PCC Page No. 28 takes a further look at costs issues arising from litigating in the Patents County Court, England and Wales.

Understanding IP: Design & Economic Growth -- the seminar held on 11 May 2011 at the House of Commons -- was noted by the IPKat here. An official report of the event has now been prepared and it available here.

The question whether the right to control Olympic-related advertising trumps the right to sell things that look, sound and act like trade marks but aren't [see yesterday's post here] has caused the IPKat to do a little gentle scratching. On 6 July 2005 the bid by London to host the 2012 Olympics was successful, the city scraping ahead of Paris by just four votes. Just eight days later the British Olympic Association filed a UK trade mark application in all 45 Classes for the word LOCOG (the acronym of the London Organizing Committee for the Olympic Games). The mark was registered in 12 May 2006, so rather more than five years has elapsed and it is disappointingly apparent to this Kat that the mark has not been used for all the goods and services within its ample specification [Not that it matters, the Trade Marks Act 1994, s.46 (1), provides that

"The registration of a trade mark may be revoked on any of the following grounds-
(a) that within the period of five years following the date of completion of the registration procedure it has not been put to genuine use in the United Kingdom, by the proprietor or with his consent, in relation to the goods or services for which it is registered, and there are no proper reasons for non-use;]

Among other things, the word LOCOG has been registered for:

"Class 05: nutritional healthfood supplements; vitamin and mineral preparations; vitamins; minerals [Illegal performance-enhancing drugs? Says Merpel, there's a good market for them and the Olympic Games are traditionally associated with their use].

Class 11: torches [ ... but the Olympic one has become the centre of a bit of a controversy of late];

Class 12: apparatus for locomotion by land; land vehicles; apparatus for locomotion by air; apparatus for locomotion by water [just wondering whether LOCOG might be a little descriptive for cogs used in locomotion ...].

Class 14: sundials [For London in the summer? A little optimistic];

Class 16: typewriters [what are the odds against LOCOG for typewriters ever being the subject of an infringement action?];

Class 18: whips [Witty comments in poor taste made by Merpel, deleted by the IPKat];

Class 25: babies napkins made of textile material [Oh for a US style 'intent-to-use' doctrine!];

Tuesday, 24 May 2011

Merciless to the end, the European Commission waited till every Kat was out at work, toiling on other pressing projects, before releasing today's bombshell -- the announcement of a new blueprint for IP rights to boost innovation. This was a subject that cried out for a rapid response, but no Kats were there to rapidly respond (or, says the ever-pedantic Merpel, to respond rapidly in the case of those readers who are squeamish about split infinitives). The Commission's press release, duly annotated by this Kat, is reproduced here and reads like this:

"IP/11/630

Brussels, 24 May 2011

Commission sets out "blueprint" for

IP Rights to boost creativity and innovation

[Cringeworthy introduction deleted in its entirety, together with quotes from Internal Market Commissioner Michel Barnier and Algirdas Šemeta, Commissioner responsible for Customs].

The IPR Strategy sets out a series of short- and long-term key policy actions in various areas which include:

Patents: the Commission already launched proposals in April for a unitary patent protection under enhanced cooperation (seeIP/11/470). Meanwhile, work will continue on proposals relating to the creation of a unified and specialised patent court for the classical European patents and the future European patents with unitary effect. This would considerably reduce litigation costs and the time it takes to resolve patent disputes. It would also increase legal certainty for business [Nothing new and unexpected here, though the Kat continues to ask how there is more business certainty for a patent owner whose patent is either valid or invalid, or infringed or non-infringed, in the entire EU, rather than on a country-by-country basis: he still has to make business decisions before he knows the outcome of these questions].

Trade marks: while trade mark registration in the EU has been harmonised in Member States for almost 20 years and the Community trade mark was established 15 years ago, there is an increasing demand for more streamlined, effective and consistent registration systems. The Commission intends to present proposals in 2011 to modernise the trade mark system both at EU and national levels and adapt it to the Internet era [No surprise here either, given the recent publication of the Max Planck's study, commissioned by the Commission, on these very issues. The point to note is that proposals are expected this year. The rumour at INTA this month was that proposals were more likely in the Spring of 2012 than in the previously-touted October 2011].

Geographical indications (GIs): GIs secure a link between a product's quality and its geographical origin. However, there is currently no such system available at EU level for the protection of non-agricultural products such as Carrara marble or Solingen knives [Indeed there isn't]. This leads to an unlevel playing field in the Single Market. The Commission will therefore carry out an in-depth analysis of the existing legal framework in the Member States as well as the potential economic impact of protection for non-agricultural GIs in 2011 and 2012 [This is important since, while the playing field is unlevel, there's not a lot of anecdotal evidence that people are playing on it. Evidence-based proposals would be good]. Depending on the outcome of an impact assessment, these could eventually be followed up by legislative proposals.

Multi-territorial copyright licensing: While the substantive scope of copyright has been largely harmonised, rights are still licensed on a national basis. In view of the digital Single Market, streamlining copyright licensing and revenue distribution is one of the most important challenges that must be addressed. In the 2nd half of 2011, the Commission will submit a proposal to create a legal framework for the efficient multi-territorial collective management of copyright, in particular in the music sector. It will also establish common rules on the transparent governance and revenue distribution. In the second half of 2011, the Commission will also launch a consultation on the various issues related to the online distribution of audiovisual works [A couple of points to note here: (i) any changes must comply with the Berne Convention requirements, or Berne itself must change; (ii) given the role of the internet in the sale and supply of musical and audiovisual products, the Commission must be mindful of the interface between EU licensing provisions and those of the rest of the world, given the fact that the internet remains doggedly international].

Digital libraries: The creation of European digital libraries that preserve and disseminate Europe's rich cultural and intellectual heritage is key to the development of the knowledge economy. To facilitate this, the Commission is also tabling today a legislative proposal that will enable the digitisation and online availability of so-called "orphan works" (works like books and newspaper or magazine articles that are still protected by copyright but where the right holders are not known or cannot be located to obtain copyright permissions) – see MEMO/11/333. Concurrently, the Commission looks forward to concluding a Memorandum of Understanding amongst libraries, publishers, authors and collecting societies to facilitate licensing solutions to digitise and make available out-of-commerce books [Merpel notes how carefully crafted this is, referring to old-fashioned things like newspapers and books which are heading for archives: the words 'photograph' and 'photographer' don't appear. Is there a reason why this might be so ...?].

IPR violations: [Usual statistics on infringement deleted] The Commission is set to intensify its efforts in this area. Firstly, the Commission has tabled a regulation today that is to reinforce the European Observatory on Counterfeiting and Piracy, which it launched in 2009, by entrusting its tasks to the Office for Harmonisation in the Internal Market (OHIM). This will allow the Observatory to benefit from OHIM's intellectual property expertise and strong record of delivery in trade marks and designs. [The Kat remains totally baffled as to what the fact that OHIM delivers trade marks has to do with the war against infringements. Midwives are great at delivering babies, but that doesn't qualify them to bring up children. Also, he has often heard businesses complaining about deficiencies in the way rights are enforced, by them by in the public sector, but in 15 years he has yet to hear any business say "If only we had a European Observatory!"] The Regulation now passes to the European Parliament and the Council for consideration. Secondly, in Spring 2012, the Commission will propose to revise the IPR Enforcement Directive (seeIP/04/540). The Directive provides for civil law measures allowing right holders to enforce their intellectual property rights but should be adapted, in particular to meet the specific challenges of the digital environment.

IPR enforcement by customs: Customs supervise all trade crossing EU external borders: they carry out controls for many purposes and have an essential role in fighting the trade in IPR infringing goods. [Horror statistics omitted] Whilst the majority of goods intercepted are counterfeit or pirated, customs' unique position at the border allows for the enforcement of a wide range of intellectual property rights. As part of today's overall IPR strategy, the Commission also proposes a new customs regulation, to further reinforce the legal framework for customs' actions. The proposal also aims to tackle the trade in small consignments of counterfeit goods sent by post as the overwhelming majority of these goods results from internet sales." [The Kats struggle to see in these words anything like "The Commission proposes to make it possible for customs to seize counterfeit goods which are passing through the territory of the EU, even if the people who profit from this trade and those who purchase such goods have the good fortune to be outside the EU, especially where it's not that difficult for such goods to slip undetected into the European marketplace"].

Says Merpel, other proposals which are missing, in no particular order, are

Making the level playing field of the single European market even more level by annexing Switzerland;

Enabling providers of intellectual property legal services throughout the EU to compete more fairly with one another by ensuring that Court of Justice rulings and opinions, as well as OHIM Board of Appeal decisions, were available in all the major languages of the European Union;

Judicial decisions should be made uniform throughout the EU: French judgments should be more reasoned; German judgments should be less reasoned; English judgments should be shorter, and so on;

The Directorate-General for Competition should be disbanded and the control of all competition matters placed in the hands of Tesco or Lidl, these being among the few enterprises in Europe that really know about competition ...

The Uniform Dispute Resolution Policy (UDRP) of ICANN, which is binding for all registrars and, by virtue of being incorporated into the domain name registration agreement, on anyone registering a domain name in a generic top level domain (notably .com, .net and .org, the others play a small role), provides since 1999 for a dispute resolution process if a trade mark owner feels that a domain name infringes his rights. Assuming IPKat readers will be roughly familiar with the policy, I shall spare you the details (some background here).

ICANN is cautiously posing the question whether the UDRP should be reformed, and has received a resounding "NO, PLEASE DON'T" from WIPO. The main arguments of WIPO, as summarized in a Webinar held on 10 May 2011, are the following:

The UDRP has been offering an effective solution for trademark owners, domain name registrants, and registration authorities.

By accommodating evolving norms and practices, the UDRP has proven to be a flexible and fair dispute resolution system.

With vast DNS growth around the corner and untested new RPMs in development, the time is wrong to revise the UDRP.

Institutionally stacked, an ICANN revision process would likely end up overburdening and diluting the UDRP.

Fundamental questions about the business and DNS beneficiaries of cybersquatting must be addressed before targeting the very mechanism intended to address this practice.

Instead of allowing the UDRP to be placed in the dock, ICANN should first fairly address the following issues:

the relationship between cybersquatting and the activities, revenues and budgets of DNS actors; the incidence of UDRP cybersquatting findings in relation to wider trademark abuse in the DNS overall, with filed UDRP cases merely representing the tip of the iceberg; and

the degree of proportionality between trademark rights enforcement and domain name registration opportunities in the DNS.

Use of privacy registration services to hide identities of cybersquatters

Establishment of bogus “registrars” that have no purpose other than to cybersquat

Summary:

The UDRP is working fairly and efficiently for its intended purpose

There are many other causes today for the steady increase in cybersquatting which ICANN should rather review

Brand owners are concerned at this time with what the expansion of the DNS will cause in terms of cybersquatting and other forms of rights infringement system at such a critical time

Unwise to review and possibly compromise UDRP system at such a critical time

Attorneys acting for complainants point out that the trade mark owners bear the entire cost of the UDRP system and suggest that a "loser pays" system may be fairer. Respondents warn against further streamlining a system that may cease to be considered fair.

The registrars have some technical issues with the UDRP, notably

The meaning of “Maintaining the Status Quo” in Section 7 is not clear: No explanation of “Legal Lock” mechanisms and when they go into effect or when they should be removed.

Policy does not provide guidance on what a registrar is to do if a claim is stayed or suspended: Is the legal lock to be removed or remain in place?

Policy does not address Privacy and Proxy Registrations or require complaining party to amend complaint once infringing party identified.

No explanation on what a registrar should do when a UDRP decision conflicts with an injunctive order issued by a of local jurisdiction.

It should be possible to implement these rather technical issues without breaking the system, this Kat thinks. As far as the message of WIPO is concerned, it couldn't be clearer: don't go there (they literally state this in an open letter to ICANN).

The Locogosaurus engages with the
Googleraptor in a fight to the death for,
er, the right to tale other people's money

Don't despair -- if you own a beloved trade mark but can't stop those dreadful folk at Google selling it to enemy aliens as an AdWord, watch this space and see whether someone else can, this being the London Organising Committee of the Olympic Games (LOCOG). According to the Kats' information,

"The London Organising Committee of the Olympic Games (LOCOG) will crack down on brands that breach its advertising restrictions online, including bidding against trade mark terms on Google, in the run-up to and during next year’s Olympic Games.

LOCOG heavily restricts the use of specific trade mark terms such as “London 2012”, “Olympic” and “Paralympic” in any marketing activity by anyone other than its commercial partners. These include Coca-Cola, McDonald’s and Visa. But competitor brands will be able to bid against these phrases on Google if the search engine maintains its current trade mark policy. For the past three years Google has allowed rival brands to buy trade mark terms.

LOCOG has yet to announce its formal online advertising policy ahead of the Games, but a spokesman told Marketing Week sister title New Media Age [which broke this story first] it was aware of Google’s trade mark rules. “We’re aware of the Google AdWords policy,” he said. “We take all attempts to ambush the London 2012 brand seriously and we deal with any incidents on a case-by-case basis.”

Since its decision to relax its rules, Google has come under fire from brands that say it’s breaking trade mark rules. However, last year the European Court of Justice (ECJ) said Google was doing no such thing [see the IPKat here, among other places]. Instead, in March this year the advocate general of the ECJ advised that it was advertisers themselves that should be found liable for trade mark infringement if they bought Google AdWords ads against rival trade marked brands [this sounds like the Interflora opinion, here].

Henry Ellis, Tamar associate director for social media, said brands must be careful if they associate themselves with the Games. “LOCOG and the Government are incredibly protective of the Olympic brand and would look to make an example of any advertiser that breaks their rules,” he said".

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